8 Jan 2020
THAILAND: Enhanced Incentives Announced for FDI Projects in Eastern Economic Corridor Provinces
All FDI-backed projects located in Thailand’s eastern coastal provinces of Chachoengsao, Chonburi and Rayong, which geographically make up the Eastern Economic Corridor (EEC), are to now become eligible for investment incentives, which were previously available only for projects located inside Industrial Estates (IEs) or promoted Industrial Zones (IZs) situated within the EEC. Among the EEC-related incentives currently on offer are corporate income tax (CIT) waivers for periods of time whose extent depends on the industry sector and location.
In addition, projects no longer need fall within the ten EEC-promoted industry sectors to become eligible for the tax incentives: they can be any projects in the three provinces that are otherwise eligible for a five-year tax holiday under a scheme offered by Thailand’s Board of Investment (BOI). At present, EEC incentives are available only for projects that fall within one of the following high-tech industry sectors - smart electronics; next-generation cars; digital services; high-end medical and wellness tourism; agriculture and biotechnology; food for the future; automation and robotics; logistics and aviation; biofuels and biochemicals; and the provision of medical services.
Additional incentives have also been recently announced for projects located within the EEC. A three-year 50% CIT exemption at the end of the initial tax break period or an extended two-year 100% CIT exemption are to be now offered to projects in the ten high-tech sectors, if they are also engaged in the development of human resources, including cooperative education and work-integrated learning programmes. Separately, a 50% CIT over a two-year period or an extended tax holiday for one additional year at the end of the initial tax break period is now available for investment projects located in the EEC’s IEs and IZs as well as in the Eastern Economic Corridor of Innovation (EECi), the Digital Park Thailand (EECd), the Eastern Airport City (EECa) and the EEC Medical Hub (EECmd).
The BOI has announced that the official application process for these enhanced incentive schemes will open on 2 January 2020 and will close on the last working day of 2021. However, applications for projects intended to be located within the EECi, EECd, EECa and the EECmd can be submitted at any time and will not be subject to any deadline.
The latest measures are in line with the recently announced Thailand Plus investment incentive package and are seen as a bid to further promote the EEC, which serves as the country’s flagship investment zone. The EEC Development Plan is not only intended to boost Thailand’s economic growth by attracting foreign direct investment in high tech sectors but is also expected to boost overall connectivity and help Thailand develop into a regional transport hub for the Greater Mekong Subregion by linking the three Thai coastal provinces with Myanmar’s Dawei deep-sea port project, Cambodia’s Sihanoukville port and Vietnam’s Vung Tau port.